Internet demand soaring across Asia

Rajeev Singh-Molares from the World Economic Forum says data needs are huge.

The chairman of the ICT agenda council at the World Economic Forum says the national broadband network will position the Australian economy to continue to expand as part of a fast-growing Asian region.

Rajeev Singh-Molares says the Asia-Pacific region will increasingly rely on fibre-based communications, as data traffic soars over coming years.

If there’s one thing that we know about the massive increase in the demand for broadband, is that demand for communications infrastructure is set to grow exponentially over the next 10 years.

According to the Cisco Visual Networking report released last June, ­global internet traffic increased eightfold over the previous five years and will increase fourfold in the next five.

So it is growing by a compound annual growth rate of 32 per cent.

Much of this growth is being driven by demand for improvements in communications technology in the Asia-Pacific region, an area that is home to countries with both the highest and lowest levels of internet penetration.

Singh-Molares is president of telecommunications provider Alcatel Lucent Asia Pacific, so he has a clear interest in advancing the cause of the NBN. The company holds a contract worth up to $1.5 billion to provide equipment for the rollout.

But he is also more aware than most of the breakneck speed of this growth of data demand.

Singh-Molares says communications infrastructure is playing a central role in modernisation throughout the region. “We are seeing an acceleration of the deployment of advanced broadband infrastructure globally, and Asia is leading the way,” he says.

“There are at least 15 large-scale fibre network rollouts currently being carried out, and there are many more which are being planned or are under way.”

According to the World Bank, the number of fixed broadband subscribers tripled between 2004 and 2009, while the number of subscribers to high-speed wireless data subscriptions increased 20-fold, and growth was driven in large part by significant increases in broadband penetration among Asia’s populous nations.

Far from playing catch-up with western Europe and North America, says Singh-Molares, some Asian countries have long led the way in terms of broadband implementation, and the first nationwide fibre project was implemented in Korea in the 1990s.

“Korea is an example of the huge economic growth which is enabled by an extensive broadband infrastructure,” Singh-Molares says.

“We’re now seeing projects being rolled out in Indonesia and India, and the Chinese government has recently announced a new five-year plan which highlights broadband as a strategic priority, because it is consistent with adding a competitive advantage to their economy.”

Over half the world’s 2.2 billion internet users live in the Asian region. Singh-Molares says this is a number that will continue to grow as Asian governments increasingly see broadband infrastructure as fundamental to the delivery of services in dense urban areas.

This approach is reflected in large-scale urban projects such as the new Incheon economic region in Korea.

Incheon is a fully planned city with extensive fibre-optic infrastructure.

China Telecom plans to replace 65 million kilometres of existing ­copper cables, which carry telephone services and rudimentary internet access, with fibre-optic cables, to ­create the backbone of a fibre-to-the-home broadband network.

It will cover 10 million families, and 68 per cent of regional administrative facilities.

“Most Asians live in dense urban environments and it is in these cities where we’re seeing broadband rolled out in order to provide basic urban services,” Singh-Molares says.

“There is also a very strong sense that if you create the opportunities for entrepreneurs to start up and for ­business to grow, then you need a good university system and good communications infrastructure, which includes access to data and the opportunity to collaborate online.”

While he says the motivations behind the NBN in Australia are slightly different from that driving many similar projects in the region, he believes the project will enable the Australian economy to continue to grow in a region that will increasingly rely on fibre-based communications.

“The specific design of the Australian national broadband network is not dissimilar to others in the region, and certainly it’s more extensive than the broadband project in the US, which really needs to be more ambitious,” Singh-Molares says.

“The thing about entrepreneurship is that it’s not about sending someone off to do a PhD, or putting them on an engineering course. Countries need to provide all their citizens with access to the skills and the technology to carry those skills.”

The new tigers of the Asia Pacific region are those countries with extensive resources and a thirst for economic development, according to Rajeev Singh-Morales, the president of Alcatel Lucent for the Asia Pacific.

Four countries in particular are on the cusp of changes that will affect the business environment, both internally and beyond their borders.

Mongolia: Offering extensive natural resources, and a comparatively small population but inadequate infrastructure, Mongolia is tipped to boom over the next decade, creating extensive demand for infrastructure and services.

Indonesia: This nation has a massive population and a rapidly expanding middle class, and it is Australia’s closest neighbour. It is tipped to be a regional powerhouse as it takes on significant modernisation projects.

Vietnam: A dynamic, entrepreneurial expatriate diaspora that can offer economic ties around the world, and a stable political environment, provide an ideal backdrop for economic growth. Vietnam is already challenging India as an offshore technology investment destination.

Burma: Although the country is in the throws of political uncertainty, change to a stable progressive government could see this country become a beacon of growth and development in the region.